HP Slate 7 price drop: competitive edge or staving off failure?

The HP Slate 7 was built for a very specific purpose and that was to compete in the cheap Android tablet market. When it first came out, it was worth $169 and, according to our own Josh Vergara, you’re essentially getting what you pay for. Is it anything groundbreaking? Definitely not, but for $169 it’s hard not to call it one of the better options in the Android tablet market. Now, the deal has gotten even sweeter as the tablet drops in price to $140.

Finding the price drop is easy. Pretty much everywhere has already slashed the price to $140 from HP’s official site to Best Buy. That’s a fairly good price for a tablet with a 1.6GHz, dual core processor, 8GB of storage with an SD card option, and, unlike the Nexus 7, has a back facing camera.

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Now here’s the question. Why is there a price drop? The HP Slate 7 was released just a few months ago so it’s hard to imagine why they’d already be dropping the price. There are a lot of reasons why an OEM would drop the price on a product. After all, a number of countries celebrated holidays over the last week. Including the United States’ Independence Day and Canada’s Canada Day. Holiday sales are always popular, right?

There’s every chance the product may not have been doing so well. We saw a dramatic price drop with the HTC First right before HTC threw in the towel on it. Similarly, we all remember HP’s last experiment in the tablet market, the HP Touchpad. A tablet that was killed not once, but twice for being unpopular and still managed to be the highest selling non-Apple tablet of 2011.

However, there is a third option. Maybe they’re just trying to be more competitive. HP did not release a tablet that could compete with the front runners. This is no Nexus 7 or even an Amazon Kindle Fire. For $200, there are far better options than the HP Slate 7. So why not undercut the competition by so much that it suddenly makes the tablet worth it? Let’s a take a quick look at the specs.

1.6GHz Dual Core A9 processor

Mali-400MP4 GPU

1GB RAM

8GB storage with SD card slot

Android 4.1

3,500 mAh battery

Back and front facing cameras

So where does the HP Slate 7 fit into the tablet market now?

Now, admittedly, we can’t see anyone wanting to pay $200 for the HP Slate 7. Even at $170, it’s a little uncertain. However, at $140 this tablet suddenly starts looking like a much better option. When you get down in the cheapest tier of the Android tablet market, you get a lot of OEMs that people don’t really know (iView, Mach Speed, WilTronic). The HP Slate 7 is a little more expensive than all of those, but the difference is that people know HP. They’ve been a trusted electronics brand for a long time.

Many bloggers, like GigaOM’s Kevin Tofel believe that this is HP still trying to compete with the Nexus 7 and openly state they’d rather pay $60 more for a Nexus 7. We can’t disagree with that stance, but there’s another way to look at it. Sure everyone would pay an extra $60 more for a Nexus 7, but would you pay $40 more to upgrade to the HP Slate 7 from the iView-900TPCII? We know we would. So is the HP Slate 7 still in the same tier as the Nexus 7 and Kindle Fire? Heavens no, but it’s now the king of the bottom rung and considering people want to spend less on Android tablets, that may still turn out well for HP.

So what do you guys think? Is this HP trying to make a few bucks off of a potentially failing tablet, or a clever marketing scheme to go after the super cheap, often terrible offerings at the bottom rung of the Android tablet market? We’d love to hear your opinion.